Difference is the world, and particularly the USA, doesn't need Saudi oil to quite the same extent as previously.
Perhaps now they don't need to be the West's principle ally in the region, or given a free pass on every human rights abuse.
Perhaps now they don't need to be the West's principle ally in the region, or given a free pass on every human rights abuse.
The US has started multiple wars to prevent the oil price from being traded in another currency.
But the US is definitely not starting wars over it.
Historically there have been a number of attempt to develop markets for oil in non USD currencies. The USD remains the biggest because - basically - of network effects.
Ironically, the new US sanctions on Iran look set to break that pattern because China is very happy to have a yuan denominated soil market: https://www.reuters.com/article/uk-iran-nuclear-china-oil/ir...
Oh please not this on HN.
Edit, appears this isn’t as well known anymore. It was literally the taking point during 2002/03 but here’s a good starting point: https://en.m.wikipedia.org/wiki/A_Clean_Break:_A_New_Strateg...
Or https://www.historycommons.org/timeline.jsp?timeline=neoconi...
The good thing is that no one can argue this is a conspiracy: the neocons were very open about it and you can find their writing everywhere.
What?
It makes no sense in any geopolitical construct.
It's about on par with Obama being from Kenya.
Starting a war is a huge thing requiring a lot of political momentum, and almost nobody in the White House ever even knows what 'petrodollar' really is, they have no instinct for why it's important for America, and there are zero Treasury officials or folks from the Fed running around saying 'let's invade' over this or that.
The list of 'usual reasons' for invading Iraq and Libya are all in public domain by now - we know the things that Bush, Cheney, Obama etc. have talked about, we know their reasoning.
There is ZERO talk of petrodollar among them - ever - for any reason, because it's irrelevant.
Military Generals sometimes fret about national security but there are ZERO instances wherein they'll talk about the petrodollar they have no idea even what it means.
The reason that most countries price in Oil is because it's very convenient to do so.
Do you think Saddam Hussein wants worthless Chinese RMB? What's he going to do with that currency? Send it to Germany to buy factory equipment? No. RMB is worthless outside of China. So what then? Pounds? Pesos? Aussie Dollars?
The only currency that could remotely be considered are Euros, but then, what's the point? Because USD are still superior and you're going to have to trade for them anyhow.
Yes, America gains somewhat from the petrodollar - and yes, they will lean on people and strong arm to keep people in check, but nobody has ever invaded anyone over currency pricing.
One can argue that cheap and easy access to oil was a reason for wars, sure.
But the USD is the world’s reserve currency. There’s no need to start a war over any attempt to pay in another currency - the money all ends up converting to USD anyway. It’s just such a minor thing in the scheme of things that no one is going to war over it.
I mean, Trump pulling out of the Iran deal has done more to promote non USD settlement than anything else. But no one really cares about the settlement aspect there.
Gaddafi had plans to develop a gold backed African Union currency and he was assassinated.
I'm not one for conspiracy theories but I am suspicious of "coincidences" in geo-politics that always end up favouring the same actors (when there is accompanying proven motive to boot).
It is not a coincidence, but it is also not simply because of just one thing.
Some euros or RMB becoming dollars for 5 seconds before they become oil is just not that big of a deal.
A similar situation applied to Gaddafi.
Foreign government hold US debt because it's a safe store of value. America can access cheap debt because it has good credit. If oil was traded in another currency for some reason those countries would still buy US debt.
> This actually serves as a deflationary effect, as it makes consumer prices cheaper for Americans in the U.S.
Deflation isn't desirable firstly. Secondly, the federal reserve controls the money supply so more demand doesn't matter as the federal reserve will just decrease interest rates to maintain 2% inflation.
It's amazing how prevalent conspiracy theorists are among people on this website. Also fyi, the amount of demand the Saudis have for the USD is a small percent (maybe a fraction of a percent) of global demand for USD. So Saudi Arabia deciding to trade oil in a different currency would have 0 effect on the US.
US debt is a safe store of value, because cheap energy can only be obtained by paying in US dollars. If you remove that motivation, the USD is just another fiat currency.
haha ok, I don't even know how this statement makes sense in your head. It's like you believe the only reason the US economy is successful is because of oil being traded in USD. Ignore the mega corporations and the giant military.
We used to be angry at how OPEC kept prices high by limiting supply afaik just fifteen years ago...
With the recent news articles about the journalist being killed, all of the "modernization" thoughts people had are totally gone. There has been a lot of money thrown into architecting a modern image - all of which was completely undone in one single news cycle.
I am no expert on the region though, just fielding some thoughts.
Apparently there is a pessimism / old joke there paraphrased as grandfather rode a camel, they drove a jeep, their children drove ferraris and their grandchildren will ride camels.
They’re the only ones I expressed an opinion on though. In the Arabian peninsula they’re a majority by population and in numbers. There are no non-Arab states on the peninsula at all. Which of Saudi Arabia, Bahrain, Qatar, the UAE, Kuwait and Oman do you see having a bright future?
I can't work out whether the recent fashion for misusing (or at least generalising) the term "nation state" is just people trying to sound clever (and failing badly), or whether there's something more sinister behind it, perhaps some kind of neo-racism, something along the lines of: if you're an X-ian then you are automatically responsible for anything that an X-ian government agency does, even if the X-ian parliament was never told about it, let alone the general population of X-ia. It's probably just people trying to sound clever but when terminology is changed I'm curious about the reasons.
Also, on reddit I was recently called an "anti-white racist." ok.
For the record ai agree with your civil libertarian principle of treating people as equals, and not as part of groups.
Also, real Nazis would definitely consider people as members of a group and not as individuals.
[0]: https://en.wikipedia.org/wiki/Petroleum_in_the_United_States...
A side-effect of ending our persecution of Iran, however, is that Putin would likely start a war. If Iran were allowed to dump their vast natural gas supplies on the open market, Russia's economy would starve.
(Edited for formatting / spelling / grammar).
No, he wouldn't. Russian establishment has no balls for that, Russian regime was already in survival mode by the end of Putin's first presidency. All they want now is to be left alone with their puny savings from days of abundance, and to die before their money run out.
Their expansionist ambitions? A bluff, a diversionary manoeuvre - plainly and simple.
Using money to make more advanced development possible, that's investments. The Norwegians got it right IMHO - they put all their oil money back in the economy, and they are punching now way above their weight! They have about 1% of the EU population, but own about 10% of EU Companies through their investments. Bar any major catastrophe, or very stupid decisions, they will have a good life for generations to come, regardless of their oil futures.
The average Türk, except for the very upper-class, would be very happy to end the influence of the Saudis in their country.
It's true that between its domestic production growth and Canada, the US could just about painlessly replace Saudi oil imports if it were necessary (1m barrels imported per day from Saudi in 2017). The US should add another million barrels per day in production over the coming year.
Saudi Arabia's production plunging (eg due to a revolution or embargo), would legitimately crash the global economy. China, India and Japan (three of the five largest economies) heavily depend on their supply.
Maybe in another ~25-30 years Saudi Arabia's oil won't be very necessary for the global economy, assuming electric vehicles make enough headway.
No, it wouldn't. Prices and taxation regime will simply adjust. Proof? Last decade prices were hitting $130+, yet nobody died. Price of air travel have plummeted last decade, and been going up since then, despite kero getting cheaper! And so did many other fuel cost sensitive industries.
What you said above is a popular culture myth.
There were a bunch of oil development projects that started up 10 years ago at $100+/barrel prices which were put on hold. IT is surprising how quickly they can be brought online.
Last time the oil price peaked we saw how effective technological change is at opening new fields and techniques.
There is also a whole bunch of Russian and deep offshore fields which become economical at high prices too.